Tuesday, April 7, 2009

According to a post at the L.A. Now blog of the L.A. Times, 24 members of a street gang have been indicted for mortgage fraud in San Diego. From the post:

Two dozen people have been charged with racketeering in a fraudulent mortgage scheme allegedly run by a street gang member, according to an indictment unsealed in San Diego federal court today.

The group allegedly profited from loans arranged for amounts in excess of the price of the housing, among other tactics. The homes quickly went into foreclosure, according to the indictment.

The alleged mastermind was Darnell Bell, 38, a member of the Lincoln Park street gang long known to law enforcement for violence and drug sales. Bell, already serving a jail sentence for distribution of cocaine, was arraigned in federal court today on a racketeering indictment.

From 2005 to 2008, the scheme involved the sale of 220 homes and mortgages worth more than $100 million issued by 70 lenders, U.S. Atty. Karen Hewitt said at a news conference.

Keith Slotter, FBI special agent in charge of the San Diego office, said the case showed that street-gang members had gone "from dealing dope on the street ... to delving into this much more sophisticated crime."...

Bell used his status as a gang member to recruit phony buyers and to "maintain discipline" among the co-conspirators, the indictment said. FBI and IRS agents today arrested Bell's 23 co-conspirators, Hewitt said.

The 24 are charged with racketeering, which could lead to much tougher sentences than other real estate fraud cases. "That's never been done before in a real estate fraud case," Slotter said.

The homes were mostly in the cities of Spring Valley and La Mesa and the San Diego neighborhood of Encanto. According to the indictment, Bell and others would look for properties that had been on the market for months.

Among the co-defendants are people in the real estate, title insurance, appraisal and notary public businesses.

I've been saying for months now that one way to prevent future mortgage fraud is to see a constant stream of perp walks for TV cameras. Just an idea!